What is a risk score?

A risk score summarises the level of risk involved in working with a company in a single figure. On Firmaskor, this value ranges from 0 to 100 and is always accompanied by a status label: Risky, Watch, or Safe.

What does the score measure?

The score measures a company's current financial standing: how comfortably it meets its liabilities, how much debt it carries, how much of its earnings are retained in the business, and how stable this picture is year over year.

What it does not measure is just as important as what it does. The score is not a forecast; it does not predict the future, nor does it constitute investment advice. It is an evaluation generated from the information provided by the company.

What pulls the score down?

• Short-term liabilities outpacing the company's rate of cash generation.
• Debt being too heavy relative to the company's carrying capacity.
• Profit failing to grow at the same pace as turnover.
• A volatile, unpredictable performance from year to year.

A company's score rarely drops because of all of these factors; typically, one falls noticeably behind. The Firmaskor report also highlights which factor was decisive.

How do you view your score?

Once you add your company and enter your financial data, your score is ready in minutes. No setup or integration is required; registration is free, and your first report is complimentary.

It also applies to the companies you work with

A risk score is not only relevant to your own business. Knowing the counterparty's solvency before committing to a dealer, customer, or supplier is far cheaper than managing collection problems later on.